Findings Of Fact In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings. Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account. The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts. The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan. The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above. Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises. Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence. The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part: "2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement." "3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report. "14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided." "It is further agreed that in case of default by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs; or else the Seller may at his option retain one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller." Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller. Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
The Issue Whether Respondent failed to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes. Respondent appeared at the hearing without legal counsel and was advised of his rights to same at his own expense. He elected to represent himself at the hearing. He was further advised as to his rights under the Administrative Procedure Act including the right to testify on his own behalf if he so desired. He indicated his understanding of his rights. It was stipulated by the parties that Joseph Sopotnick, Joseph Sopotnick, Jr., and Joe Sopotnick are one and the same person.
Findings Of Fact At all pertinent times under consideration in these proceedings, Respondent was a registered real estate broker (Stipulation of parties, Exhibit 2) In March 1974, Alvin K. Whittington of Marietta, Georgia, upon the recommendation of his job supervisor, who had dealt with Respondent in the past, called the Respondent on the telephone concerning the possibility of purchasing land in Florida. Although the Respondent indicated that he had none available at that time, he called Whittington later on in the day and told him that he had certain property which was for sale and inquired as to when he could come down to Florida to look it over. Whittington informed him that he did not know when he would be able to visit Florida and Respondent advised him to send a deposit in order to hold the land since there was a contractor interested in the same property. Whittington told him that he did not like the idea of placing a deposit on property that he had not seen and inquired as to whether or not he could secure a return of the deposit if, after he had seen the land he did not wish to purchase it. Respondent told him "That's no problem. You can get your deposit back". He advised him to send the deposit and that he would hold it until he came to Florida. Accordingly, Whittington sent a check for $360.00, dated March 20, 1974, to the Respondent which indicated on its face that it was a "deposit on Fla. shore lots - N.W. corner Needle Palm & 18th". The check was signed by Mrs. Whittington on a joint account with her husband. The sum of $360.00 represented 10 percent of a purchase price of $3600.00. After talking to Whittington, Respondent on March 20 wrote to the owners of the property, advised that a deposit check would be forthcoming and enclosed a standard sales contract for the sellers to execute and return to him. This was accomplished and Respondent then forwarded the contract to the Whittingtons for execution and return which they received on April 1st. Mr. Whittington thereupon called the Respondent and told him that he could not sign the contract without seeing the property. On April 12th, he and his wife went to Florida, met with the Respondent, looked over the lots in question, and informed the Respondent that he would call him the following Monday as to whether or not he wished to make the purchase. On April 15th, Whittington called the Respondent, informed him that he did not wish to purchase the property and requested return of his deposit. Respondent informed him he could not return it and that disposition of the deposit would be a matter to be determined by the seller. Thereafter, on April 19th, Respondent wrote to the Whittingtons informing them that after careful consideration, he intended to treat the matter as a forfeiture of deposit situation, and unless he heard from them to the contrary he would disburse the deposit to the seller under the terms of the contract. However, he stated in the letter that he would apply the full deposit to any purchase that the Whittingtons might thereafter wish to make. After receipt of this letter, Whittington again called the Respondent concerning the situation at which time Respondent informed him that he would try to get 1/3 of the deposit returned if Whittington would send him a letter indicating that he would accept such an amount. Nothing further was heard from the Respondent and the deposit was never refunded (Testimony of Mr. & Mrs. Whittington, Composite Exhibit 1, Exhibits 3, 4). On or about July 2, 1974, Respondent remitted 1/2 of the deposit to sellers and retained 1/2 for himself (Stipulation of parties) Respondent testified that Whittington had insisted he accept the deposit and send the contract to the seller to insure that he would be able to purchase the property, and that the proposed deal was not contingent upon the buyer's satisfaction with the property. He denied telling Whittington he could get his deposit back. He also testified that after the Whittingtons viewed the property in Florida, he asked Whittington about the contract and the latter said that he had not brought it with him but would send it within a few days. That when he thereafter called upon his return to Georgia, he informed Respondent that he did not wish to make the purchase because his wife was about to have a baby. Respondent contended at the hearing that he was never sure that Whittington wanted his deposit back, however, conceded that Composite Exhibit 1f was his letter to the sellers advising that the Whittingtons had requested the return of the deposit. Respondent asserted that it was his impression that if a deposit had been made in good faith, it was proper to consider that there was a binding contract even though the depositor had not signed a sales contract. He further indicated that if he was wrong in this respect he would return the deposit. At no time did the Respondent ever discuss the transaction with the sellers. He was unaware of the provisions of Section 475.25(1)(c), by which a registrant may seek advice from the real estate commission if he entertains, in good faith, doubt concerning his duty to account and deliver a deposit. Respondent has been in the real estate business for twelve years (Testimony of Respondent, Composite Exhibit 1f).
Recommendation That Respondent's registration as a real estate broker be suspended for a period of 60 days. That the period of suspension in excess of 30 days be vacated if the Respondent returns the $350.00 deposit to Mr. & Mrs. Alvin K. Whittington prior to the expiration of the aforesaid period of 30 days from the original date of suspension. DONE and ENTERED this 20th day of February, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue Is Respondent, Victoria D. Wiedle, guilty of failure to account for and deliver funds, in violation of Section 475.25(1)(d)1, Florida Statutes, and, if so, what is the appropriate penalty.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. At all times material hereto, Respondent Wiedle was a licensed real estate broker, having been issued license number BK-0646846, and was principal broker of Escarosa Realty. Respondent's license is still active. Janice Marlene Christian is a realtor associate. She was an independent contractor with Escarosa Realty from December 1998 until April 1999. Accordingly, Respondent Wiedle was Ms. Christian's registered broker during this time. Ms. Beverly Lewis is the mother-in-law of Ms. Christian's brother. Ms. Lewis came to Ms. Christian in February 1999 because she was interested in looking for and purchasing a house. On February 16, 1999, Ms. Christian facilitated an Exclusive Buyer Brokerage Agreement (the Agreement) on behalf of Escarosa Realty with Ms. Lewis. The Agreement was on a form created by Formulator, a software company. "Florida Association of Realtors" appears on the face of the document. Paragraph 6 of the Agreement reads in pertinent part: RETAINER: Upon final execution of this agreement, Buyer will pay to Broker a non- refundable retainer fee of $0 for Broker's services ("Retainer"). Accordingly, Respondent was not entitled to any money as a retainer fee for broker services pursuant to this agreement. The agreement was signed by Ms. Lewis, Ms. Christian, and Ms. Wiedle and became effective on February 16, 1999. The specified termination date of the agreement was August 17, 1999. On or about February 27, 1999, Ms. Christian tendered an offer to sellers on behalf of Ms. Lewis, for property located at 107 Poi Avenue in Santa Rosa County (subject property). Pursuant to this offer, Ms. Lewis gave a $500.00 check dated February 27, 1999, to Ms. Christian as earnest money. The check is made out as follows: "Escarosa Realty Inc. Escrow". Ms. Lewis wrote in the memo section of the check that the check was escrow money for 107 Poi Terrace. The $500.00 check was deposited in Escarosa Realty's escrow account on March 1, 1999. Respondent accounted for the $500.00 check on the March 1999 monthly reconciliation statement for Escarosa Realty. The seller of the subject property made a counter- offer for a higher price which Ms. Lewis rejected. The testimony differs as to what happened next. According to Ms. Christian, Ms. Christian spoke to Respondent sometime after Ms. Lewis rejected the counter-offer about refunding the escrow money to Ms. Lewis. According to Ms. Christian, Respondent informed her that she did not have to give the escrow money back to Ms. Lewis yet because she had the buyer broker agreement. Ms. Christian further asserts that she filled out a written request on March 16, 1999, on a form entitled "EMD Request," which means earnest money deposit request, and gave it to Respondent who again asserted that the $500.00 did not need to be returned at that time because of the buyer brokerage agreement. Ms. Christian's testimony is consistent with Ms. Lewis's. According to Ms. Lewis, she talked to Ms. Christian about getting a refund of the $500.00 shortly after she rejected the counter-offer. She and Ms. Christian discussed the EMD form. She initially agreed that Respondent could temporarily maintain the escrow funds. However, when Ms. Lewis discovered that the financing she was seeking through the rural development program would take several months, she decided she wanted the money returned. Ms. Christian ended her contract with Escarosa Realty effective April 14, 1999. Because Ms. Christian was no longer at Escarosa, Ms. Lewis contacted Respondent by telephone on or about April 21, 1999. Ms. Lewis informed Respondent about the purchase offer and rejection of the counter-offer for the subject property. According to Ms. Lewis, Respondent initially told her she would return the money to her in the mail. When she did not receive it, Ms. Lewis again called Respondent and was told that the $500.00 would not be returned because of the buyer brokerage agreement was still in place. Ms. Lewis asserts that Respondent never told her any request for a refund of the $500.00 had to be in writing. Ms. Lewis then went to the Escarosa Realty office. Ms. Weidle was not there but Elnora Alexander was there. Ms. Alexander was also a realtor associate who was an independent contractor with Escarosa Realty. Ms. Lewis explained to Ms. Alexander about the circumstances of the subject property and that she wanted her earnest money back. Ms. Alexander gave a copy of the buyer broker agreement to Ms. Lewis. After going to Escarosa Realty, Ms. Lewis had numerous other telephone conversations with Respondent about the money. Respondent denies any knowledge of the Poi Terrace failed transaction until she spoke to Ms. Lewis on the phone. She also denied ever receiving the EMD request from Ms. Christian. Respondent asserts that she repeatedly told Ms. Lewis that she would return the $500.00 if Ms. Lewis would only make a request in writing, but that Ms. Lewis refused. This assertion is not credible. It is inconceivable that after all of the efforts made by Ms. Lewis to get her $500.00 returned to her, that she would refuse to make a written request for the money. In any event, there is no dispute that Ms. Lewis made verbal requests to Respondent for the return of the escrow monies. Respondent Wiedle admits that Ms. Lewis requested the money over the telephone. Further, in an April 2, 2001 letter from Respondent to the Division of Real Estate, Respondent acknowledged that Ms. Lewis asked for a refund of the money in the beginning of May and again in early June of 1999. Clearly, if Respondent Wiedle had not previously been aware of the failed Poi Terrace transaction, she was made aware of it during the telephone conversations with Ms. Lewis. Notwithstanding Respondent's assertion that the reason she did not refund the $500.00 to Ms. Lewis was that the request was not in writing, it is clear from Respondent's testimony and from a letter she wrote to Mr. Clanton, Petitioner's investigator, that she believed the $500.00 was connected to the buyer brokerage agreement, not to any offer for purchase of property. In an undated letter from Respondent Wiedle to Mr. Clanton, Respondent wrote: Dear Mr. Clanton, This is in response to your letter dated August 17th, 1999. First Beverly A. Lewis was refunded her money on August 20, 1999 check #111. Second I would like to respond to her complaint. Beverly A. Lewis signed a Exclusive Buyer Brokerage Agreement with EscaRosa Realty, Inc. on February 16th, 1999 with it to terminate on August 17th 1999. Beverly A. Lewis knew that her deposit was a refundable deposit after the agreement is expired not before. As the Broker of this company I had no contact with Beverly Lewis until the agent Marlene Christian was asked to leave the company. If there ever was a contract for her to purchase a house then her agent Marlene Christian never informed me of nor did she ever provide any such contract. The deposit was given to me with the Exclusive Buyer Brokerage Agreement only. Nor did her agent Marlene ever fill out the EMD refund request form requesting a refund to be given to Beverly A. Lewis. However, The result would have been the same. I asked Beverly Lewis If she had changed her mind on purchasing a house she said no she was still going to buy a house but that she knew if she didn't buy her house through Marlene at her new company that Marlene would make life very hard on her. I told her I was sorry but that is the whole purpose in the contract was to secure your buyers from just going all over the place. . . .(emphasis supplied) Respondent refunded the $500.00 to Ms. Lewis on August 10, 1999. At hearing, Respondent volunteered that there was a previous complaint against her for failing to return money she held under a buyer brokerage agreement with a former client. In that instance, the Probable Cause Panel of the Florida Real Estate Commission found no probable cause but issued a letter of guidance to Respondent.1
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, the evidence of record and the demeanor of the witnesses, it is RECOMMENDED: That a final order be entered by the Florida Real Estate Commission finding the Respondent, Victoria D. Wiedle, guilty of violating Section 475.25(1)(d), Florida Statutes, in that she failed to deliver escrow money upon demand, imposing a fine of $1,000.00, and placing Respondent Wiedle on probation for a period of two years. As conditions of probation, Respondent should be required to attend a continuing education course which addresses appropriate handling of escrow funds and be subject to periodic inspections and interviews by a Department of Business and Professional Regulation investigator. DONE AND ENTERED this 14th day of June, 2002, in Tallahassee, Leon County, Florida. BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 2002.
Findings Of Fact Respondent, George G. Walsh, is a licensed real estate broker in the State of Florida, holding license number 0117943. Mr. Walsh is the owner of and the qualifying broker for G. G. Jerry Walsh Real Estate, located in Panama city, Florida. In May 1989, Respondent was the acting broker for Howard Bilford of Miami, Florida. Mr. Bilford owned a five acre parcel of property located in Bay County, Florida. Around May 15, 1989, Tama and Paul Russ, through Mr. Walsh's office, entered into a contract for the purchase of Mr. Bilford's property. The purchase price of the property was $15,000. The Russ' gave Mr. Walsh a $500 binder for deposit in his escrow account. The $500 was placed in Respondent's escrow account. Simultaneous with the signing of the sales contract and deposit receipt agreement, Mr. Walsh also prepared an estimated closing cost statement. On that closing cost statement, Mr. Walsh estimated that a survey of the property would cost the Russ' $450. During this meeting, Mr. Walsh explained to the Russ' that, especially if a financial institution was involved in the financing of the property, there would be certain costs which they would probably have to pay up front. Part of those costs included a survey of the property. At about the same time, the Russ' made application for a loan to a credit union located in Panama City, Florida. At the time of the loan application, the loan officers Mrs. Stokes, prepared a closing cost statement estimating the loan closing costs which the Russ' would encounter. On the credit union's closing cost statement, the cost of a survey was estimated to be $150 to $200. Since it was the credit union that required the survey, the Russ' believed that that estimate was the more accurate. The Russ' simply could not afford a $500 survey. As part of the loan application, an appraisal of the property was required. The appraisal was ordered by the credit union on May 16, 1989, and was completed on May 31, 1989. Unfortunately, the property had been vandalized by unknown persons, and the mobile home which was on the property had suffered severe and substantial damage. The appraisal indicated that the real estate was worth $10,500. With such a low appraisal, the credit union would not lend the amount necessary to purchase the property at the negotiated price. In an effort to renegotiate the property's price, Tama Russ inspected the property and prepared a list of the items which would have to be repaired to make the mobile home liveable. At the same time, the Russ' placed no trespassing signs and pulled logs across the entry to the property. The Russ' also placed padlocks on the doors to the mobile home and removed the accumulated garbage inside the mobile home in an effort to secure the property. They made no other repairs to the property. On June 1, 1990, the Russ' told the loan officer to hold the loan application. At some point during this process, both Mr. Walsh and the Russ' became aware that the survey would cost a considerable amount more than had been expected. By using a favor with Mr. Walsingham of County Wide Surveying, Mr. Walsh obtained a survey price of $500 for the Russ'. In an effort to help the Russ' close on the property, Mr. Walsh contacted Mr. Bilford to see if he would agree to pay the $500 survey cost. Mr. Bilford so agreed, contingent on the closure of the transaction, and sent Mr. Walsh a check made out to County Wide Surveying in the amount of $500. At that point, the Russ' believed that they were no longer obligated to pay for the survey since Mr. Walsh told them that Mr. Bilford was to pay for the survey. On June 3, 1989, Mr. Bilford agreed to a renegotiated price of $10,500.00 on the property. Additionally the Russ' agreed to sign a ten year promissory note for $2,000 bearing 11% interest per annum. Since there were changes in the terms of the contract, the Russ' entered into a net contract with Mr. Bilford on June 3, 1989. The new contract expired on June 30, 1989. Around June 5, 1989, the Russ' learned that their credit had been preliminarily approved. However, such preliminary approval only indicated that the Russ' had sufficient income to proceed with the more costly loan underwriting requirements of the credit union. Such preliminary approval did not indicate that the loan would be finally approved by the financial institution. The preliminary approval was communicated to Mr. Walsh by Tama Russ. Ms. Russ intended the communication to mean that they had been preliminarily approved by the financial institution. Mr. Walsh in an abundance caution contacted Mrs. Stokes, the loan officer. Mrs. Stokes advised him that the Russ' credit had been preliminarily approved. She did not tell him that the loan had been finally approved. Through a misunderstanding of what Mrs. Stokes communicated to him, Mr. Walsh ordered the survey from County Wide Realty on June 7, 1989. There was no reliable evidence presented that the credit union had authorized him to order the survey. The credit union at no time during this process ordered the survey. Mr. Walsh testified that Ms. Russ told him to order the survey. Ms. Russ denies that she gave Mr. Walsh permission to order the survey. At best this evidence goes only to demonstrate Respondent's intent with regards to the actions he undertook in this case and removes this case from a Section 475.25(1)(b), Florida Statutes, violation. At some point Ms. Stokes left the employ of the credit union. On June 16, 1989, as part of her leaving, she unilaterally closed the Russ' loan application file and cancelled the loan application. Neither the Russ' nor Mr. Walsh were notified of the closure or the cancellation. The credit union's file fell into the void created between a change of employees. Because Mr. Walsh was unaware of Ms. Stokes' actions, Mr. Walsh, on July 13, 1989, after the expiration of the Russ' sales contract, contacted the credit union in order to obtain the loan closing package from the institution. The credit union had to hunt for the Russ' file. The credit union president called the Russ' about the loan and he was advised that they did not want the loan. The credit union's president then reviewed the loan file and noted that the Russ' had insufficient income to come up with the amount of the promissory note. He also thought the real estate constituted insufficient collateral for the loan. The loan application was officially denied on July 15, 1989. The Russ' were notified of the credit union's denial credit. The real estate transaction never closed. However, sometime after July 15, 1989, Mr. Walsh received the survey from County Wide. The survey indicates that the field work for the survey was completed on July 17, 1989, and that it was drawn on July 18, 1989. 1/ There was no reliable evidence which indicated any attempt had been made to cancel the survey. Sometime, after July 15, 1989, Tama Russ contacted Mr. Walsh in order to obtain the return of their $500 deposit. After many failed attempts to get the Russ' to voluntarily agree to pay for the cost of the survey, Mr. Walsh, around October, 1989, unilaterally paid the Russ' deposit to County Wide Realty. Mr. Walsh followed this course of action after speaking with some local FREC members who advised him that since FREC was swamped with deposit disputes that nothing would happen as long as he used his best judgment. The payment of the deposit to the surveyor, without prior authorization from the Ruse' violates Section 475.25(1)(d) and (k) Florida Statutes.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(d) and 475.25(1)(k), Florida Statutes, issuing a letter of reprimand to Respondent with instructions to immediately replace the Russ' trust deposit and forthwith submit the matter to the commission for an escrow disbursement order and levying a $250 fine. IT IS FURTHER RECOMMENDED that the portions of the Administrative Complaint alleging violation of Section 475.25(1)(b) be dismissed. DONE and ENTERED this 29th day of January, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 1991.
Findings Of Fact LANE TRANSACTION On August 10, 1972, Arnold and Beth Lane executed a $4,500 note to the Bank. Documentary stamps in the proper amount were affixed. The borrowers paid their obligation down to $2,616 and then on May 4, 1976, executed a new note for $4,100 to the Bank. Documentary stamp taxes of $2.25 were paid, reflecting only the amount due on the $1,483 "new money." The Department has assessed the Bank for taxes on the entire obligation, plus penalties, totaling, $7.80. WILSON TRANSACTION On April 5, 1975, T. R. Wilson executed a $6,500 note to the Bank. Documentary stamps in, the proper amount were affixed to the note. On April 30, 1975, prior to making the first payment, Wilson executed an $8,500 note to the Bank. Documentary stamps were affixed to the second note in the amount of $3.00, reflecting the amount due on a $2,000 obligation. The Department has assessed taxes and penalties on this transaction in the amount of $19.50. DON HOWELL AUTO SALES INC., TRANSACTION In August (no date specified), 1975, Donald Howell (as president), David Howell (as Vice President and Gladys Howell (as Secretary) of Don Howell Auto Sales signed a floor plan note for a maximum loan amount of $65,000. Documentary stamps were affixed to the note in the amount of $101.25, an overpayment of $3.75. On August 30, 1975, Donald Howell (as President) and Gladys Howell (as Secretary) signed a new floor plan note for $85,000. Documentary stamps in the amount of $26.25 were affixed to the note. This amount, added to the overpayment previously mentioned, reflected only the taxes due on the $20,000 "new money." The Department has assessed taxes and penalties on this transaction in the amounts of $195.00, reflecting the extra amounts due on the full face amount of the second note. HARRIS TRANSACTION The Harris transaction was actually a series of transactions. On February 19, 1971, Loy and Susie Harris signed a note for $7,192.28 to the Bank. Documentary stamps in the proper amount were affixed. This obligation was renewed several times through renewal notes involving no "new money," and the borrowers reduced their outstanding principal balance to $4,000. In a second, unrelated loan on December 17, 1973, the Harrises signed a $50,000 note to the Bank. Documentary stamps in the proper amount were affixed. They made one payment under this obligation, reducing the outstanding principal balance to $45,987.86. In a third, unrelated loan on June 6, 1974, the Harrises signed a $7,000 note to the Bank. Documentary stamps in the proper amount were affixed. No payments were made to reduce the outstanding principal balance. In a fourth, unrelated loan on August 26, 1974, the Harrises signed a $11,500 note to the Bank. Documentary stamps in the proper amount were affixed. No payments were made to reduce the outstanding principal balance. On November 27, 1974, the Harrises had a total outstanding principal balance on all four previous transactions of $68,487.86. That date they executed a new note for $100,000, reflecting the previous balance plus $31,512.14 "new money." In addition, the new loan pledged as security three life insurance policies not appearing as security in any of the previous transactions. Documentary stamps were affixed to this final note in amounts reflecting only the "new money." The Department has assessed taxes and penalties in the amount of $205.20 reflecting the extra amounts due on the full face amount of the final note. LOHR TRANSACTION On June 2, 1966, J. Fred Lohr, Emily Lohr, J. A. Lohr, and Maureen Lohr executed a $5,000 note to the Bank. Documentary stamps in the proper amount were affixed to the note. On February 25, 1971, the parties executed a $10,000 note to the Bank reflecting a renewal of the original loan plus $5,000 "new money." Documentary stamps were affixed in the amount of $7.50, reflecting only the amount due for the "new money." Both of these transactions were secured by an assignment of a savings account. On November 20, 1975, the same parties executed a renewal note of $10,000 secured by a U. S. Treasury bill. No "new money" was involved in this transaction. Nevertheless, the Department assessed a deficiency for taxes and penalties in the amount of $15.00 because the renewal note failed to include, as an attachment, a previous note bearing the proper amount of stamps. XYZ LIQUORS, INC. TRANSACTION On May 22, 1975, XYZ Liquors executed an $85,500 note to the Bank. The Bank's records reflect that of the face amount of the note, only $80,955 was actually advanced to the borrower. Documentary stamps reflecting only the amount of this advance were attached to the note. The Bank's records reflect that the present outstanding principal balance on this loan is $77,581.85. The Department has assessed taxes and penalties of $13.50 on this transaction, reflecting the extra amounts due on the full face amount of the note. FLORIDA REFRESHMENT CENTERS, INC., TRANSACTION On May 5, 1975, Florida Refreshment Centers executed a $117,000 note to the Bank, and received an immediate advance under the note of $100,000. The Bank's records reflect that this advance has been paid down to $10,000 and no new advances have been made. Documentary stamps were affixed to the note in the amount of $150, reflecting the taxes payable on the $100,000 advance. The Department has assessed taxes and penalties of $51.00 on this transaction, reflecting the extra amounts due on the full face amount of the note. LAUGHNER TRANSACTION On September 19, 1969, Norman Laughner executed a $150,000 note to the Bank. This transaction was exempt from documentary stamp taxation at the time by Federal law, and consequently no documentary stamp taxes were paid. (See First Nat'l Bank of Homestead v. Dickinson, 291 F.Supp. 855 (N.D. Fla. 1968), aff'd, 393 U.S. 409, 89 S. Ct. 685, 21 L.Ed.2d 634 (1969). Congress then acted to repeal the exemption from state taxation enjoyed by national banking institutions. (See 12 U.S.C. 548, enacted in Pub. L. 91-156, effective December 24, 1969). Laughner paid his obligation down to $10,000, and then on September 23, 1975, executed a new note for $10,000 in renewal of the original loan. No documentary stamp taxes were paid on the renewal note. The Department assessed taxes and penalties on this renewal note in the amount of $30.00, because no properly stamped original note was attached. DICKIE EQUIPMENT COMPANY TRANSACTION On August 5, 1975, David Dickie Equipment signed a floor plan note for a maximum loan in the amount of $60,000 to the Bank. Documentary stamps were affixed to this document in the amount of $150, $60 in excess of the proper amount. On January 28, 1976, Dickie, in the same capacities as before, signed a floor plan note for a maximum loan amount of $100,000. No documentary stamps were affixed. On July 2, 1976, David Dickie as President of the Dickie Equipment Co., Inc. (a corporation, as opposed to the proprietorship which borrowed under the previous notes) and Steve Dickie, as Vice President, signed a third floor plan note for maximum loan amount of $100,000. This note also included the signatures of Steve Dickie, individually, and Shirley Dickie, in an unspecified capacity, as endorsers and sureties. No documentary stamps were affixed to this note. The Department contends that this transaction embodies new promises to pay, and has assessed taxes and penalties in the amount of $300.00. On or about October 2, 1973, the Bank borrowed $300,000 from the Franklin National Bank, a New York bank. J. Howard Vaughn (as President) and Charles Davis (as Cashier) on the Bank's behalf signed a note for this amount. Although the note states on its face that it is payable in New York, the Department believes that it was actually executed by the Bank's officers in the State of Florida and later mailed to New York, and further that the loan's proceeds were used in Florida. No documentary stamps were affixed to the note. The Department has assessed documentary stamps taxes and penalties in the amount of $900 on this transaction. Parenthetically, it appears that the Franklin National Bank is presently in receivership, and the Federal Deposit Insurance Corporation holds this note. (Exhibit 3) In a discussion with Respondent's tax examiner in September, 1976, officials of Petitioner were advised that in cases involving renewal notes where "new money" was advanced to the borrower, documentary stamp tax would not be assessed upon the entire principal balance if one note for the principal balance was executed at the date of renewal and a second note for the additional advance of money was also executed. In such a case, only the amount of the second note would be taxable. Petitioner claims that this information was never disseminated to it by written directives from Respondent. (Testimony of Davis, Kloska)
Recommendation That Petitioner be held liable for documentary stamp tax and penalty under Chapter 201, Florida Statutes, as set forth in revised assessment Number 63-94, February 7, 1977, in the amount of $1,831.35. DONE and ENTERED this 14th day of March, 1977 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1977. COPIES FURNISHED: David K. Miller, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304 D. A. Troiano, Esquire Post Office Box 829 Lakeland, Florida 33802
Findings Of Fact Respondent, Theodore L. Aubuchon, Jr., has been licensed by the Department of Insurance as a general lines agent and limited surety agent for a period of approximately 12 years. Other than the instant Administrative Complaint and its attendant Emergency Order of Suspension, Respondent has never been the subject of an Administrative Complaint or the subject of disciplinary action by the Department of Insurance. Respondent was served with an Emergency Order of Suspension in November of 1985, to which he failed to respond, and as of the date of the hearing in this cause, his licenses as a general lines agent and as a limited surety agent have been suspended since November of 1985. Pioneer Bonding & Insurance Agency, Inc. (hereinafter "Pioneer"), was formed in 1963 by its first president, Respondent's grandfather. Respondent's father took over control of the company in approximately 1965, and Respondent succeeded to the position of president in 1979. Respondent remained as an employee of Pioneer and its president until some time in 1985. Pioneer acted as a general agent for American Druggists' Insurance Company (hereinafter "ADIC") from 1973 until approximately March of 1984, pursuant to an agency agreement. That agreement specifically sets forth the respective responsibilities of ADIC and Pioneer as it pertains to the bail bond business, including but not limited to the processing of claims, reports, disposition of collateral, and the return of collateral. All counts of this Administrative Complaint deal with bonds underwritten by ADIC. By letter dated October 3, 1983, ADIC advised Petitioner that Respondent d/b/a Pioneer had satisfactorily performed all duties as general agent for ADIC, that no claims were outstanding against Respondent, that any claims preceding the date of the letter were forever waived by ADIC, and that all funds collected were being maintained in accordance with the law. Shortly after the letter of October 3, 1983, ADIC advised Respondent that it was exercising its 120-day option for termination of its agency agreement. Upon being so advised, Respondent began negotiating with ADIC in an attempt to enter into a limited agency agreement solely for the purpose of servicing outstanding and continuing bonds beyond March of 1984. No formal limited agency agreement was ever consummated, and by May 29, 1984, ADIC employee Norman Stotts had been sent by ADIC to handle the transition, to audit Pioneer's books and records regarding ADIC bonds, and to essentially take control over all bonds written by Pioneer on behalf of ADIC. Because no limited agency agreement regulating the servicing of outstanding and continuing bonds was entered into between them, both ADIC and Pioneer sought to control the disposition of collateral and to resolve forfeitures. ADIC at no time gave any written directions to Pioneer as to the manner in which collateral was to be disposed of upon the termination of the agency agreement between them. Further, as of June 1984, Norman Stotts was in possession of the books and records of Pioneer on behalf of ADIC. In June of 1984, ADIC filed a civil action in the United States District Court for the Southern District of Florida against Pioneer, Respondent, and others. On August 24, 1985, that federal court issued an injunction prohibiting the release of any funds previously received by Pioneer or by Respondent in connection with the issuance of ADIC bonds. ADIC voluntarily dismissed the federal litigation on July 8, 1986. On April 30, 1986, the Court of Common Pleas in Franklin County, Ohio, issued an Order of Liquidation and Injunction against ADIC, which Order had the effect of prohibiting the disbursement of funds or collateral held by any agents or brokers of that company. On the following day, pursuant to a motion filed by Petitioner, the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, issued an Order Appointing Ancillary Receiver for purposes of liquidation, which Order also contained an injunction directed against ADIC agents. On January 7, 1983, Karla Myers obtained a surety bond in the amount of $5,000 for Robert Myers Painting, Inc. with ADIC as surety. Respondent signed the surety bond as agent for the surety. Similarly, Respondent signed the collateral security receipt as attorney-in-fact for ADIC. By its terms, the surety bond expired February 28, 1985. By an unnotarized letter dated March 5, 1985, the Tri-County Painters and Decorators Joint Trade Board, Inc. released Robert Myers Painting, Inc. from the surety bond, which letter was received by Karla Myers on March 8, 1985. Subsequent to March 8, 1985, Karla Myers made numerous telephone calls to Pioneer to obtain the return of her $5,000 in collateral. She was advised by employees at Pioneer that Respondent was no longer employed at Pioneer, and on one occasion, Myers contacted Respondent at his home. Respondent advised her that he would need to confer with his attorney regarding the matter. By March, 1985, Respondent was no longer in control of the books and records of Pioneer, with those books and records being in the control and custody of Norman Stotts. A notarized release, along with the original copy of the Collateral Security Agreement, was not provided by Karla Myers to Respondent or Pioneer in order to secure the release of the $5,000 in collateral, and Pioneer and Respondent were already engaged in litigation with ADIC, Respondent having been advised by his attorney not to discuss that litigation. On approximately August 20 1986, ADIC authorized Respondent to return the Myers collateral. Respondent then obtained the authorization of Petitioner, and the collateral was returned to Myers in August of 1986. On August 10, 1983, Pioneer accepted from Antonio and Jane Mininni $10,000 as collateral for a beverage wholesaler's bond underwritten by ADIC. A subsequent increase in the bond to $15,000 was required by the Florida Division of Alcoholic Beverages and Tobacco. On April 9, 1985, ADIC advised Mininni d/b/a Old Bridge, Inc., that its bond was being cancelled effective June 10, 1985, and that there would be a 90-day waiting period before the collateral would be returned. That waiting period would have expired on September 10, 1985, after the entry of the federal injunction. On June 13, 1985, the Old Bridge, Inc. bond was transferred from ADIC to Southland Insurance Company in order that Old Bridge, Inc. would continue to have the state-required coverage. Mininni participated in and approved that transfer. At all times Old Bridge, Inc. had coverage for the total amount of coverage it had purchased. In August of 1986, Mr. and Mrs. Mininni on behalf of their business, Old Bridge, Inc., executed a release releasing Pioneer, ADIC, and Respondent; the federal court litigation had been dismissed; Respondent obtained authorization from ADIC and from Petitioner to return to Old Bridge, Inc. its collateral; and the collateral was returned. On behalf of a client, attorney Sam Pendino needed to make arrangements for collateral on four bail bonds. In a telephone conversation with Respondent, Pendino advised that he wanted an attorney, rather than an insurance company, to hold the collateral under an escrow agreement. Respondent suggested the name of attorney Terence T. O'Malley, Sr. Pendino subsequently satisfied himself that O'Malley was a licensed attorney authorized to practice law in the State of Florida, and on January 13, 1984, an escrow agreement was entered into by and between Pendino and O'Malley under which O'Malley became the escrow agent for the collateral. That escrow agreement was later signed by Respondent on behalf of ADIC. Pendino and O'Malley physically put the collateral, with an approximate value of $100,000 made up of $57,500 in cash and the balance in precious metals, into a safe deposit box which they rented on the same day that the escrow agreement was signed. Respondent was not a signator on the safe deposit box and was not present at the time the actual transfer of the collateral took place. No evidence was offered to indicate that Respondent ever came into possession of any of the collateral. Under the terms of the escrow agreement, O'Malley was responsible for returning the collateral with no further authorization needed upon the discharge of the bonds for which the collateral had been placed. The bonds were discharged on September 3, 1985, after entry of the federal court injunction. Pendino contacted O'Malley, but O'Malley failed to return the collateral. Pendino filed a lawsuit against O'Malley. He included Respondent as a defendant because Respondent had signed the escrow agreement. According to Pendino's attorney who was the only witness to testify on Petitioner's behalf regarding this transaction, at all stages of the litigation Respondent was disassociated from O'Malley's position, had agreed to the return of the collateral, and had requested the Court to enter orders returning the collateral to Pendino. By the time of the final hearing in this cause, O'Malley had already been held in civil contempt of court and there was presently pending an indirect criminal contempt proceeding regarding false testimony given by O'Malley as to the location of the collateral in question. Respondent, on behalf of Pioneer and ADIC, wrote a bail bond in the amount of $250,000 to guarantee the appearance of John Lee Paul, Sr., in the Circuit Court of St. Johns County, Florida. Certain real property in Georgia was placed as collateral for the bond. The bond was subsequently ordered forfeited, and judgment was entered against ADIC on January 16, 1984. The real property which was the collateral for the bail bond was sold, and the proceeds were transferred to the general operating account of Pioneer. On June 20, 1984, the legal representative of ADIC and Pioneer, the Assistant State Attorney, the St. Johns County Attorney, the Clerk of the Circuit Court for St. Johns County, and the attorney for the Clerk of the Circuit Court entered into a stipulation for a payment schedule on that final judgment. The payment schedule set forth in that stipulation was approved by the Court on June 21, 1984. Since that time, the bond has been paid in full. It is a common practice for a surety company, with the approval of the Court, to arrange an extended payment schedule when such a large bond has been estreated.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent not guilty of the allegations contained within the Administrative Complaint filed against him, dismissing that Administrative Complaint with prejudice, and immediately reinstating Respondent's suspended licenses. DONE and RECOMMENDED this 9th day of April, 1987, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway The Oakland Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0660 Specific rulings as to Petitioner's proposed findings of fact are as follows: Adopted. Rejected as being immaterial. Adopted. Adopted. Rejected as not constituting a finding of fact. Rejected as being immaterial. Adopted. Adopted. Rejected as being secondary. Rejected as being secondary. Adopted. Adopted. Adopted. Rejected as being secondary. Adopted. Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Adopted. Adopted. Rejected as not constituting a finding of fact. Adopted. Specific rulings as to Respondent's proposed findings of fact are as follows: Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Adopted as to Respondent's licensure; remainder rejected since marital status and education are irrelevant. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Rejected as being secondary. Adopted. Adopted. Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Adopted. Rejected as being secondary. Adopted. Adopted. Adopted. Rejected as being secondary. Adopted. Rejected as being secondary. Rejected as being secondary. Rejected as not constituting a finding of fact. COPIES FURNISHED: Howard L. Greitzer, Esquire Post Office Box 1778 Ft. Lauderdale, Florida 33302-1778 Lealand L. McCharen, Esquire 413-B Larson Building Tallahassee, Florida 32399-0300 Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Whether Respondents committed the offenses described in the Administrative Complaint? If so, what disciplinary action should be taken against them?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Parties The Department is a state government licensing and regulatory agency. Raymond Mangicapra is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida. He holds license number 0326800. FUGI is now, and has been at all times material to the instant case, a corporation registered as a real estate broker in the State of Florida. It holds registration number 0245691. At all times material to the instant case prior to March 5, 1992, Mangicapra was the broker of record for FUGI. On March 5, 1992, he resigned as FUGI's broker of record and its president. Approximately five months later he returned to FUGI in the capacity of a licensed broker-salesman The Angulo Transaction On or about April 26 1991, Jose Angulo, his wife Martha Salazar Angulo, and their son Carlos Angulo, signed a written contract (hereinafter referred to as the "Angulo contract") to purchase from Lofts Development Corp. (hereinafter referred to as "LDC"), for $98,300.00, real property located in the Willow Wood subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Mangicapra was also a part-owner of LDC and its qualifying agent. His partner was Vincent Ferri. Ferri, on behalf of LDC, signed the Angulo contract on May 2, 1991. Article II, Section C. of the Angulo contract provided, in part, as follows: Use of Mortgage Loan: Time to Make Application: Purchaser intends to pay for a portion of the Purchase Price by obtaining a permanent mortgage loan ("Mortgage Loan"). Purchaser agrees to make application(s) for such Mortgage Loan from a bona fide lending institution approved by Seller ("Mortgagee") in the amount of [$96,050.00], at applicable interest rates. Purchaser agrees to make application for such Mortgage Loan within five (5) days from execution of this Contract by Purchaser. Purchaser agrees to promptly execute all necessary documents, disclose all information within fourteen (14) days of request and pay all costs as and when requested of it by Mortgagee and/or Seller in conjunction with such application and take all other measures to aid in being approved for a Mortgage Loan, including the making of further applications for a Mortgage Loan. Failure to Obtain Mortgage Loan: Purchaser agrees that in the event Purchaser fails to qualify for such Mortgage Loan or fails to qualify for a Mortgage Loan sufficient in an amount to enable Purchaser to close after duly and promptly complying with all requests of the Mortgagee and/or Seller, Purchaser shall notify Seller of this fact, in writing, whereupon Seller may request that Purchaser make further applications for a Mortgage Loan. In the event that Purchaser fails to qualify for a Mortgage Loan with any Mortgagee after duly and promptly complying with all requests of the Mortgagee and/or the Seller, as provided above, then Seller shall, at its sole discretion, either (a) give a Mortgage Loan to Purchaser at applicable interest rates at the time such Mortgage Loan is closed for the Full Amount; or (b) transfer or otherwise assign a Mortgage Loan obtained by Seller at applicable interest rates at the time such Mortgage Loan is obtained for the Full Amount which Purchaser agrees to assume at closing in lieu of any other Mortgage Loan and for which Purchaser shall reimburse Seller for all loan closing costs, title insurance premiums and escrow balances existing at closing relative to such assumed Mortgage Loan; (c) in the instance where Purchaser is approved for a Mortgage Loan in an amount less than the Full Amount, unless otherwise prohibited by reason of government or lender regulations, take a purchase money second mortgage from Purchaser at applicable interest rates for a term not to exceed five (5) years and Purchaser shall pay all closing costs in connection with such purchase money second mortgage; or (d) return any monies paid hereunder less a sum for engineering and other expenses reasonably incurred in effecting and processing this Contract whereupon this Contract shall be terminated and the parties hereto shall be relieved of all further rights and obligations hereunder. Default by Purchaser: In the event Seller ascertains that Purchaser has failed to qualify for a Mortgage Loan due to Purchaser's failure to duly or promptly comply with all requests of the Mortgagee and/or Seller or due to failure on the part of Purchaser to supply accurate information, then any such event shall constitute default by Purchaser hereunder, entitling Seller to retain all sums paid hereunder as set forth in accordance with Article VI hereof. Notwithstanding anything contained in this Article II to the contrary or notwithstanding a subsequent mortgage disapproval by a Mortgagee, Purchaser specifically agrees that once a mortgage approval is obtained by Purchaser from one Mortgagee, the deposit monies paid by the Purchaser to Seller shall no longer be refundable. . . . Article III, Section D. of the Angulo contract provided, in part, as follows: Subject to the following provisions of this Paragraph, the estimated date of completion for the residence shall be on or about 120 days from mtg approv. . . . . In the event said Residence shall not be completed two (2) years from the date of this Contract as aforesaid, Purchaser shall have the option to cancel this Contract by giving written notice to Seller ("Cancellation Notice") within 5 days after two (2) years from the date of this Contract ("Cancellation Period") and upon such cancellation Seller shall refund to Purchaser his deposit made hereunder. Upon such Refund, all parties to this Contract shall be fully discharged and relieved from the terms and obligations hereof. Liability of Seller is limited to the Refund and in no event shall Seller be liable to Purchaser for any damages which Purchaser may sustain. In the event Purchaser does not send the Cancellation Notice within the Cancellation Period, this Contract shall remain in full force and effect and Purchaser shall not have the right to cancel this Contract unless Seller is otherwise in default of this Contract. Seller shall not be obliged to make, provide or compensate for any accommodations to Purchaser as a result of delayed completion nor shall Seller be liable for any expenses or inconveniences to Purchaser which may directly or indirectly arise from delay of delivery of possession. Article VI, Section A. of the Angulo contract addressed the subject of "Purchaser's Default." It provided, in part, as follows: If Purchaser shall fail to cure such default within such seven (7) day period, Seller shall, and does hereby have the unrestricted option to (1) consider Purchaser in default under this Contract, (2) retain all sums paid to it, whether held in escrow or otherwise, hereunder as agreed upon and liqu[id]ated damages and in full settlement of any claim for damages, and (3) terminate all rights of Purchaser under this Contract. . . . Article VII of the Angulo contract addressed the subject of "Deposit Money." It provided as follows: Seller shall at its option have the right to use the deposit money for any purposes as it deems necessary. Article VIII, Section B. of the Angulo contract provided as follows: Purchaser represents and warrants that this sale of the Property pursuant to this Contract was made by Seller's personnel and Purchaser agrees to indemnify and hold harmless Seller against any claims of real estate brokers for commissions relating to this sale. Article VIII, Section C. of the Angulo contract provided as follows: This Contract may not be assigned, sold or transferred by Purchaser without the prior written consent thereto by Seller, which consent may be withheld in Seller's sole discretion. There was no comparable provision in the contract restricting LDC's right to assign. Article VIII, Section E. of the Angulo contract provided as follows: This Contract shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and, as permitted hereunder, assigns. Addendum E to the Angulo contract, which was signed by the Angulos on April 26, 1991, and by Ferri on May 2, 1991, provided, in part, as follows: The purchaser(s) of a one or two family residential dwelling unit has the right to have all deposit fund[s] (up to 10 percent of the purchase price) deposited in an interest bearing escrow account. This right may be waived in writing by the purchaser(s). Purchaser(s) hereby waive their right to have all deposit funds (up to 10 percent of purchase price) deposited in an interest bearing escrow account. . . . First Union Group, Inc., is the agent for the Seller(s) and will be paid for his services by the Seller(s). . . . The Angulos' initial deposit was a check, which they gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, they signed a Reservation Deposit/Contract Deposit Transfer Agreement, which provided, in part, as follows: It is specifically understood that this Earnest Money deposit is to be held in First Union Group, Inc's (hereinafter First Union Group) trust account. Upon acceptance of said reservation/contract between [the Angulos] (buyer) and Lofts Development Corp. (seller), and upon clearance of said deposit, buyer agrees that First Union Group may automatically transfer to seller said Earnest Money and said Earnest Money shall be treated as purchasers['] initial investment deposit. Purchaser agrees that once said reservation/contract between buyer and seller named above is accepted by seller, and there is in effect a purchase agreement, any and all future deposits due per said purchase agreement shall be made payable directly [to] seller. If any future deposits are inadvertently made payable to First Union Group, buyer hereby gives First Union Group the right and authorization to transfer said deposit money to seller. Any deviation to the above must be in writing from buyer at the time of the reservation/contract. . . . The "automatic transfer" of deposit monies from the real estate broker holding these monies to the seller/builder, like that authorized by this signed Reservation Deposit/Contract Deposit Transfer Agreement, was the accepted practice in the area. Mangicapra deposited the $500.00 check he had been given by the Angulos in FUGI's interest-bearing money market escrow account at Capital Bank in Delray Beach, Florida. The deposit was noted on the Angulos's ledger card. Respondents did not have the written permission of all interested parties to place the Angulos' deposit monies in such an interest-bearing account. Respondents received three other earnest money deposits from the Angulos: a check, dated May 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "May 30 check"); a check, dated June 30, 1991, payable to FUGI in the amount of $700.00 (hereinafter referred to as the "June 30 check"); and a check, dated July 30, 1991, payable to FUGI in the amount of $600.00 (hereinafter referred to as the "July 30 check"). The June 30 and July 30 checks were deposited in FUGI's interest- bearing money market escrow account at Capital Bank and the deposits were noted on the Angulos' ledger card. The May 30 check, however, was inadvertently deposited in FUGI's general operating account at Capital Bank, instead of its escrow account, as a result of a bookkeeping error. On or about August 8, 1991, Respondents wrote a check (hereinafter referred to as "check #1395") transferring $4,800.00 from its Capital Bank escrow account to LDC. The $4,800.00 represented escrow funds being held by Respondents in connection with six different transactions. It included $1,800.00 of the $2,500.00 in earnest money deposits that Respondents had received from the Angulos. The transfer of this $1,800.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Upon receiving check #1395, Ferri endorsed it back to FUGI to compensate FUGI for services it had provided LDC and for expenses FUGI had incurred in conjunction with the performance of these services. The endorsed check was deposited in FUGI's interest-bearing money market account at Capital Bank. On or about November 1, 1991, Donna Archer, who was then an employee of FUGI, sent a Verification of Escrow Deposit to Paragon Mortgage Corporation (hereinafter referred to as "PMC"), from whom the Angulos were attempting to obtain a mortgage loan. Archer provided the following erroneous information in this Verification of Escrow Deposit: As Escrow Agent in the [Angulo] transaction, we are now holding the following amount in our escrow account for the above captioned transaction: $2,500.00------- total held in escrow. On or about December 26, 1991, PMC sent the Angulos the following letter advising them that their application for a mortgage loan had been conditionally approved: We are please[d] to inform you that your application for a FHA mortgage in the amount of 95,750.00 has been approved. The following items are contingencies on the loan and must be met prior to closing. Provide independent documentation of YTD income for Martha (i.e. copy of ledger signed by accountant of employer) Amendment of contract to reflect the following, contract to remain current through closing Hazard insurance policy for at least the loan amount Survey with flood certification [C]lear soil treatment guaranty Clear final inspection Proof of 10 year HOW warranty or 2/10 [h]ome buyers warranty At the time this conditional loan commitment was made, the master appraisal of the property was about to expire. Accordingly, an extension of the deadline was sought by PMC. By written agreement, dated April 26, 1992, and signed by Ferri and Jules Minker, the president of Contemporary Community Concepts Corp. (hereinafter referred to as "Contemporary"), LDC, which no longer wished to construct homes in the Willow Wood subdivision, assigned the Angulo contract to Contemporary: In consideration of the sum of $10.00 Ten Dollars lawful money of the United States, I, Vincent A. Ferri, President of Lofts Development Corporation, hereby assign without reservation or limitation and free of encumbrance, the purchase contract between Jose Antonio and Martha Salazar Angulo, his wife and Lofts Development Corporation, dated April 26, 1991 to Contemporary Community Concepts Corporation. The deposit monies indicated and due under the contract in the approximate amount of $1800.00 Eighteen Hundred Dollars, are not transferred by this agreement and remain with Lofts Development Corporation. In fact, the "deposit monies indicated and due under the contract," amounted to $2,500.00, although only $1,800.00 of that amount had been transferred to LDC. In May of 1992, upon attempting to contact Mangicapra to find out why LDC had not yet begun to work on their house, the Angulos discovered that FUGI had closed the office out of which it had been conducting its business. The Angulos brought the matter to the attention of Sharon Couglin of PMC. Couglin wrote a letter to an official at HUD to apprise the agency of the situation. A copy of the letter was sent to the Florida Real Estate Commission. Notwithstanding the Angulos' beliefs to the contrary, FUGI was still in business. It had simply moved to another location in Boynton Beach. (Mangicapra was not at this time, however, associated with FUGI in any way.) Minker contacted FUGI and the Angulos and advised them that the Angulo contract had been assigned to Contemporary. In his discussions with the Angulos, Minker told them that they would be given credit for the earnest money deposits that they had made. The Angulos, in turn, indicated that they wanted Contemporary to proceed with the construction of the house LDC had agreed to build for them. In accordance with the Angulos' stated desires, Contemporary proceeded with the construction of the house. As the house neared completion, the Angulos learned that the conditional mortgage loan commitment they had received was no longer valid because the master appraisal had expired. They thereupon tried to contact FUGI to explore their options. This time they were successful in their efforts to get in touch with a FUGI representative. They spoke with Denise Preziosi, who had replaced Mangicapra as FUGI's broker of record. The Angulos asked Preziosi if they could obtain a refund of their deposit monies in the event they decided that they did not want to go through with their purchase of the house. Preziosi indicated that she did not know the answer to the question and that, in any event, FUGI no longer held any of the Angulos' deposit monies. At the time she made this statement, Preziosi was under the mistaken impression that FUGI had transferred all of these monies to LDC. On or about November 25, 1992, Preziosi sent a letter to Minker, the body of which read, in part, as follows: I am in receipt of a copy of the "Agreement" between Contemporary Community Concepts Corporation and Lofts Development Corporation which Patti faxed to me yesterday. In reading this Agreement, I noticed that the amount stated as a credit to the Angulos is $1800 rather than the $2500 they did in fact pay to Lofts. I understand that you did not nor will not receive any money from Lofts but that you agreed to accept the assignment of the contract and would give them credit for their deposit. In this regard, please amend your records to reflect a credit of $2,500 as deposit monies rather than $1,800. The Angulos made their final color selections for the house in mid- December, 1992. Thereafter Minker obtained a certificate of occupancy for the house. Although Carlos Angulo, in Minker's office, signed a document prepared by Minker agreeing "to complete loan processing for a new loan and to close on [the house] when funds are made available as a result of this application, but not to exceed 60 days," 1/ when Carlos took this document home and presented it to his parents for their signature, they refused to sign it. The Angulos did not "complete loan processing for a new loan." The Angulos have not been refunded any of the $2,500.00 in earnest money deposits they have made, nor have they received any of the interest earned on these deposits. It has not been shown, however, that the Angulos are now, or were at any time previous hereto, entitled to such a refund under the provisions of their contract with LDC. The White-Hunt Transaction On or about May 3, 1990, Stacey White-Hunt signed a written contract (hereinafter referred to as the "White-Hunt contract") to purchase from LDC, for $97,000.00, real property located in the Delray Garden Estates subdivision in Palm Beach County upon which a residence was to be constructed. FUGI, through its then broker of record, Mangicapra, negotiated the sale for LDC. Ferri, on behalf of LDC, signed the White-Hunt contract on May 9, 1990. The White-Hunt contract contained provisions identical in all material respects to Article II, Section C., Article III, Section D., Article VI, Section A., Article VII, and Article VIII, Sections B., C. 2/ and E. of the Angulo contract, as well as Addendum E to the Angulo contract. (These contractual provisions are set out above.) White-Hunt's initial deposit was a check, which she gave to Mangicapra, made out to FUGI in the amount of $500.00. In conjunction with making this payment, she signed a Reservation Deposit/Contract Deposit Transfer Agreement, which was identical in all material respects to the Reservation Deposit/Contract Deposit Transfer Agreement signed by the Angulos. Respondents received one other earnest money deposit from White-Hunt. It was a check payable to FUGI in the amount of $1,000.00. The $500.00 check and the $1,000.00 check were deposited in FUGI's interest-bearing money market escrow account at Capital Bank and the deposits were noted on White-Hunt's ledger card. Respondents did not have the written permission of all interested parties to place White-Hunt's deposit monies in such an interest-bearing account. On or about May 23, 1990, Respondents wrote a check transferring $6,500.00 from its Capital Bank escrow account to LDC. The $6,500.00 represented escrow funds being held by Respondents in connection with various transactions. It included the $1,500.00 in earnest money deposits that Respondents had received from White-Hunt. The transfer of this $1,500.00 to LDC was in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement signed by White-Hunt. White-Hunt sought, but failed to qualify for, a conventional mortgage loan. Thereafter she applied for an FHA mortgage loan. By notice dated October 10, 1991, she was advised that her application had been denied. On February 7, 1992, the law firm representing White-Hunt sent a letter to Respondents, the body of which read as follows: Please be advised that I have been retained by Stacey Hunt with regard to the above- referenced Contract in order to secure a return of her deposit. I have enclosed herein copies of the deposit checks made payable to ERA First Union Group in the total sum of $1,500.00 which were provided to you on April 17, 1990 and May 8, 1990. Since Ms. Hunt has failed to qualify for a mortgage, in accordance with Paragraph (b)(2) of the Contract, this letter shall serve as formal demand for a return of any and all deposits placed with your company and any and all interest accrued thereon. In the event I am not in receipt of a check payable to Ms. Hunt on or before February 14, 1992, I will presume that you have converted these funds and proceed to undertake . . . any and all efforts to have the funds returned including, without limitation, contacting the Florida Real Estate Commission. Preziosi, on behalf of FUGI, responded by letter to the law firm. The body of her letter read as follows: In response to your letter of even date enclosed please find a copy of a Reservation Deposit/Contract Deposit Transfer which was signed on April 17, 1990 by Stacey Hunt. You will note that this agreement states that once a contract between buyer and seller is in effect, any deposit money given to First Union Group, Inc. will be transferred to the seller and treated as the initial investment deposit. Further, all future deposits are to be made payable to the seller. If an additional deposit was received by First Union Group, Inc., it too would be transferred to the seller. In this regard, be advised that on May 23, 1990, $1,500 that was being held by First Union Group, Inc. on behalf of Ms. Hunt was transferred to Lofts Development Corp. as per this agreement. Also enclosed is a copy of the check together with a copy of the escrow cards which represented all deposits transferred via this check. Respondents have not returned any deposit monies to White-Hunt; however, as Preziosi pointed out in her letter, well before White-Hunt had requested a refund from them, Respondents had transferred these monies to LDC in accordance with the Reservation Deposit/Contract Deposit Transfer Agreement White-Hunt had signed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Mangicapra guilty of the violations alleged in Counts I, III, IV, V, and XV of the Amended Administrative Complaint to the extent indicated above, suspending Mangicapra's license for a period of 120 days and fining him $3,000.00 for having committed these violations, finding FUGI guilty of the violations alleged in Counts VI, VIII, IX, X, and XX of the Amended Administrative Complaint to the extent indicated above, suspending FUGI's registration for a period of 120 days and fining it $3,000.00 for having committed these violations, and dismissing the remaining allegations set forth in the Amended Administrative Complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of June, 1993. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1993.
The Issue Whether the Respondent's real estate license in Florida should be disciplined because the Respondent committed fraud, misrepresentation, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes. Whether the Respondent's real estate license should be disciplined because the Respondent failed to account and deliver funds in violation of Subsection 475.25(1)(b), Florida Statutes.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular, Section 20.30, Florida Statutes, Chapters 120, 455 and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent Joyce A. Wolford is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0313643 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, t/a Blue Ribbon Realty, 1400 N. Semoran Boulevard, Orlando, Florida 32807. As To Counts I and II Diane Ortiz was employed by Respondent Joyce Wolford to perform various duties, including operating the computer and taking messages. During her employment with Respondent, Diane Ortiz completed a contract for sale and purchase of certain real property which was signed by Jane Evers as buyer. In conjunction with the Evers contract, Ortiz did receive an earnest money deposit in the form of a cashier's check for the sum of $1000 and made payable to Blue Ribbon Realty. The earnest money deposit check given by Evers was turned over to Respondent by Ortiz. The endorsement on the Evers deposit check was Blue Ribbon Realty. The sale was contingent on Evers' assumption of the existing mortgage. The mortgagee did not approve Evers, and the transaction did not close. Evers contacted Ortiz and Respondent on several occasions and demanded return of her $1,000 deposit. Evers met personally with Respondent and demanded return of the $1,000 deposit. Evers sent a written demand for the return of the deposit by certified mail to Respondent on August 9, 1989. Despite Evers repeated demands for return of the $1000 deposit, Respondent has not returned any money to Evers. Jane Evers filed a lawsuit against Respondent Joyce Wolford in the County Court for Orange County, Florida, for the sum of $1,000 and court costs. A Final Judgment in the civil lawsuit was rendered for Jane Evers against Joyce Wolford for $1,000 principal plus $73 in court costs on March 15, 1990. Respondent has not satisfied the Final Judgment awarded to Evers or any portion thereof. As To Counts III and IV Anthony Pellegrino did enter a contract to purchase certain real property known as Lakefront Motel near Clermont, Florida. Respondent Joyce Wolford did negotiate the contract. Pellegrino did give Respondent a $5,000 earnest money deposit in the form of a cashier's check to secure the contract for purchase of Lakefront Motel. The cashier's check given as a deposit by Pellegrino was endorsed to Blue Ribbon Realty account #0880510063. The Lakefront transaction did not close, and Pellegrino demanded that Respondent return the $5,000 earnest money deposit on several occasions. Respondent has not returned the $5,000 deposit or any portion thereof to Pellegrino. The $5,000 earnest money deposit for the Lakefront contract was transferred to a mortgage company for a transaction involving a condominium that Pellegrino sought to purchase. Said condominium transaction did not close. In neither case did Respondent request the Florida Real Estate Commission to issue an escrow disbursement order. On July 2, 1990, the Florida Real Estate Commission entered a Final Order in the case of Department of Professional Regulation v. Joyce Wolford, finding Respondent guilty of failure to account and deliver a commission to a salesman and imposing a reprimand and an administrative fine of $1000.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Respondent be found guilty of having violated Subsections 475.25(1)(b) and (d), Florida Statutes (1989), as charged in Counts I, II, III and IV of the Administrative Complaint. It is further recommended that Respondent's real estate license be suspended for two years, imposing an administrative fine in the amount of $1,000 and, upon completion of the suspension period, placing Respondent on probation for a period of two years with such conditions as the Commission may find just and reasonable. DONE AND ENTERED this 8th day of October, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's proposed findings of fact: Accepted in substance: Paragraphs 1,2,3,4,5,6,9,10,11,12,13,14,15,16,1,7,18,19,20,21,22,24 (in part), 25 Rejected as cumulative or irrelevant: 7,8,23,24 (in part) Respondent's proposed findings of fact: Accepted in substance: Paragraph 1 Rejected as against the greater weight of the evidence: Paragraph 2,3 COPIES FURNISHED: Janine B. Myrick, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Raymond Bodiford, Esquire 47 East Robinson Street Orlando, FL 32801 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0750
